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The Treasury provides equity arrangements related to donations for technical assistance to repair war-damaged infrastructure in Ukraine.
The measures supplement the BMF letter of March 17, 2022 (cf. News) and relate to free value deliveries:
No taxation of gratuitous value deliveries
If a free service is provided which is aimed directly at repairing war-damaged infrastructure in Ukraine, for reasons of equity, no free value tax will be taxed in this case until December 31, 2023. This applies, for example, to the free provision of building materials, construction machinery, technical equipment and personnel, including any transport services.
input tax deduction
The tax authorities also make equity regulations in connection with the input tax deduction: If the entrepreneur already intends to use the services exclusively and directly for the stated purposes when the service is purchased, the corresponding input tax amounts are to be taken into account under the other conditions of § 15 UStG by means of equity, contrary to Section 15.15 Para. 1 UStAE to be taken into account. The following free supply of value is not taxed according to the previous paragraph in equity.
Federal Ministry of Finance, letter from March 13, 2023, III C 2 – S 7500/22/10005 :005
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